his breeding stock because of poor maintenance
of the enclosures, as well as to predators
The 42ha farm Ostrich Oasis in Hammanskraal near Pretoria was once a thriving business, offering unique tourism opportunities and a ready source of meat and chicks. However, since 2006, when emerging farmer Isaac Banda and his group applied for a loan from Land Affairs to purchase the property, the farm has witnessed a steady decline, leaving Isaac and his group with more debt than they ever imagined. David Steynberg reports.
In 2002 when Isaac Banda, a resident of the Atteridgeville informal settlement near Pretoria, responded to a newspaper advertisement stating government’s plan to create jobs through agriculture, he never imagined that six years later he would be financially worse off than when he started. After meeting Andries Maila, an old hand in the chicken broiler business, Isaac’s group soon grew to 27 people, eager to uproot themselves from poverty.
It was a positive start. The Tshwane municipality organised skills development training to verse the agricultural hopefuls in formal management courses, and Isaac completed 63- and 42-day financial management courses. He saw his future as bright and prosperous. However, though they were armed with this newly acquired knowledge, the municipality’s aid went only so far, leaving the students to find their own professional outlets. The group’s numbers soon plummeted first to 10, then to its current six.
In 2003 the group approached Land for a grant to purchase a farm. However, with each person only eligible for R20 000, translating to a measly R120 000, the group was never going to afford a respectable farm. “We approached previous land and agriculture minister Thoko Didiza for more money,” Isaac says. “R20 000 each is too little.” But their requests fell on deaf ears.
The age of Lulama and Plas
In 2006 came the appointment of a new land and agriculture minister Lulama Xingwana and the implementation of the Proactive Land Acquisition Strategy (Plas). Through Plas beneficiaries can lease from Land Affairs for three years with the option to purchase, each year paying 6% of the farm’s value and receiving a 30% discount on the overall price of the land. Then, after three years in limbo, Isaac responded to a newspaper advertisement for a 42ha ostrich farm in Hammanskraal, named Ostrich Oasis, for R3,7 million. Having formed a close corporation on Land Affairs’ recommendation, the group soon found itself eligible to purchase the farm, with Land Affairs meeting the price tag and the group leasing from the government department for three years.
In June 2006 Isaac met with Johan Weilbach, the farm’s previous owner, and Abie de Jongh from Sondelani Prime Ostrich, one of Weilbach’s clients. “This man [Abie], showed a good spirit to do business with us,” Isaac says. “In June he met with Land Affairs and signed a letter to show that he would support us.” Abie agreed to buy all Isaac’s stock to prove to Land Affairs that the group would have a ready market, thus ensuring a viable business. Land Affairs said it would process the application and Weilbach would get his money in November 2006. And then, as is so often the case, Land Affairs claimed difficulties in processing the claim and promised Weilbach that his money would be forthcoming on 15 December. Finally on 29 June 2007, with Isaac constantly pressurising Land Affairs, the application was processed – the same day Isaac and the group moved onto the farm.
Hurdles to the oasis On 29 May 2007 Isaac and the group travelled to Bela-Bela in Limpopo to attend a two-day workshop for emerging farmers, organised by Land Affairs. Representative of the Department of Agriculture and Land Affairs, Mzwakhe Ndlela, explained to the farmers that because of the switch to the Plas system, the department could no longer offer a 25% discount on infrastructure.
Because of this, Ndlela had invited Standard Bank, Absa and Khula to the meeting to encourage the financial institutions to help the farmers access funding. The next week Isaac approached Standard Bank for a loan and explained that he needed R2 million to run the farm for 2007/08, and had to buy six-month-old chicks to start turning over an income. But the bank required R1,2 million (60%) in security. According to Land Affairs policy, the department only offers beneficiaries a 30% discount on the land, excluding livestock and input costs. For infrastructure upgrades and repairs, beneficiaries have to provide a quotation. Unable to meet the R400 000 price-tag on the ostriches, Isaac approached Absa in July 2007 for a loan – the application was rejected on the grounds of zero security.
Demotivated, Isaac again approached Weilbach for help. “He considered our problem and told us to come back the next week, once he’d discussed it with his wife,” Isaac says. The next week, as promised, Isaac met with Weilbach who considered Isaac’s dilemma and agreed to give him the 42 breeding stock. As payment, Weilbach sold the six-month-old chicks produced so far. The equipment, such as incubators and a feed processing mill, were also donated to the group. Weilbach confirmed all this in writing to Land Affairs.
An engaged tone
The group’s plan was to purchase 400 chicks in various growth cycles and sell them to obtain some start-up capital to pay their labourers, electricity account and themselves. Because the Eskom Development Foundation helps emerging farmers access funding and support, Malesela Manaka of Land Affairs told Isaac to contact Comfort Sekwaile of the Eskom Development Foundation. Using the telephone numbers supplied to him proved frustrating as Sekwaile never answered the calls, forcing Isaac to leave countless messages. When Isaac finally did manage to get hold of Sekwaile, Sekwaile confirmed that he had received the calls and promised to call him back when he wasn’t so busy. Isaac has received no response to date.
Running out of options, Isaac contacted the agriculture department for help, which put him in contact with Gideon Sithole, an extension officer based in Johannesburg. Sithole explained to him that Land Affairs had never informed the Metsweding district municipality that Isaac and the group had taken over from Weilbach. As a result, the local municipality had not included Isaac in its annual budget, further complicating matters. Sithole said the department could now only help so much, and got Land Affairs to pay the outstanding electricity transfer bill. In November last year the group was finally included in the Metsweding municipality’s budget, and municipal manager Chikane Chikane told Isaac that he would be given R40 000 to cover feed costs and buy a new aircon for the incubator room.
Each ostrich consumes 3kg of feed per day, which would be difficult to supply without a sizeable loan, and considering Isaac has already lost 200 eggs due to poor-quality feed and power outages, it seems this may be too little too late. Out of desperation to get some running capital, Isaac has started selling steel from the farm, as well as livestock to pay electricity bills and labourers’ wages.
Royal predicament
Despite all this confusion, incorrect protocols followed and lack of communication between government departments, development finance enterprise Khula is able to fund 90% of the farm’s value and thus provide security so Isaac can access a loan. However, because Isaac has already entered into the agreement with Land Affairs, which now owns the title to the farm, Khula is unable to finance the project.
This leaves Isaac with two choices: leave the farm and exit the deal with Land Affairs to access funding for another, likely less-developed farm, or continue with the current business and hope someone is able to help. With nowhere to turn, Isaac has already considered exploring new ventures. Contact Isaac Banda on 083 688 2465.
